As summer comes to a close, Chile wraps up the season with a subtle but shifting economic narrative. The Central Bank has cut rates for the first time this year but stubborn inflation is slamming the brakes on further easing. Consumer prices unexpectedly increased in July and social equity issues surfaced amid new digital security measures. Regulatory momentum continues, with a second fintech push gaining shape. Presidential elections are now just three months away - holding steady will require both economic agility and political savvy.
Monetary PolicyThe Central Bank lowered the benchmark rate by 25bps in July, taking it down to 4.75% and flagged that future moves would depend on demand and inflation dynamics. Markets now expect additional cuts toward 4.50% by year end. This confirms the shift we anticipated in our July brief, when we highlighted the first move lower after months of holding steady at 5%.
Inflation & ForecastsAfter June’s surprise 0.4% drop, inflation turned sharpl...
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